AI Structured Summary
Not yet generated for this judgment
Judgment
The present petition has been filed by the petitioner, an NBFC, under Section 11 of Arbitration and Conciliation Act, 1996 seeking constitution of an Arbitral Tribunal to adjudicate the disputes between the parties.
The factual matrix, set forth by the petitioner, is that the respondents approached the Tata Capital Financial Services Limited (hereinafter “TCFSL”), which now stands merged with the petitioner w.e.f.01.01.2024, through a loan application dated 15.03.2021.
Pursuant thereto, TCFSL sanctioned a facility of Rs. 43,00,000/- vide Sanction Letter dated 16.03.2021 (Sanction letter –1). Thereafter, TCFSL and the respondents executed, inter alia, Loan-cum-Guarantee Agreement dated 19.03.2021, read with Master Terms and Conditions dated 31.12.2018.
Subsequently, the terms of the Facility were modified vide an addendum sanction letter dated 24.09.2021 (Sanction letter-2).
On 10.04.2022, a fresh loan application was submitted by the respondents. Pursuant thereto, TCFSL renewed the loan facility for Rs.30,00,000/- vide Sanction Letter dated 12.04.2022 (Sanction letter-3), and a Renewal Letter along with a Loan-cum-Guarantee Agreement dated 25.04.2022, read with Master Terms and Conditions dated 31.12.2018 was executed.
Thereafter, the loan Facility was further renewed and modified for Rs. 30,00,000/- vide Sanction Letter dated 24.05.2023 ((Sanction letter-4), followed by execution of, inter alia, Loan-cum-Guarantee Agreement dated 21.06.2023, read with Master Terms and Conditions dated 31.12.2018; and Renewal Letter dated 21.06.2023.
The disputes between the parties arose on account of alleged defaults in repayments. Consequently, a Loan Recall Notice dated 16.05.2025 was issued by the petitioner, demanding Rs. 19,46,789.44/- and invoking arbitration. The relevant extract of the said Loan Recall Notice is as under:
“14.In the event you, Nos. 1 to 3, fail to comply with your payment obligations, it shall be presumed that disputes, differences, claims, etc. have arisen between you and Our Client and this notice may be treated as notice under Clause 12 of the Loan cum Guarantee Agreement 3 (dated 21.06.2023) read with Clause 23 of the Master Terms and Conditions hereby invoking arbitration.”
However, the same was not responded to by the respondents nor was the outstanding amount under the Loan Agreement paid by the respondent. Hence the present petition.
The arbitration clause contained in the Loan-cum-Guarantee Agreement dated 21.06.2023 is as under:
Annexure-I to the said Loan-cum-Guarantee Agreement reads as under:
Notice in the present petition was issued to the respondents on 08.07.2025. However, in view of the non-appearance of the respondents despite service, vide order dated 19.09.2025, liberty was granted to the petitioner to serve the respondents afresh. Affidavits of service dated 18.08.2025 and 17.09.2025 have been duly filed by the petitioner.
It is noted that the order dated 20.02.2026, records the appearance of ‘Mr. Aman Goyal, Advocate’ for the respondents. Thereafter, none has appeared for the respondents. In view of the aforesaid, the present petition is taken up for hearing and disposal, despite no appearance on behalf of the respondents.
Since the existence of the arbitration agreement is apparent from a perusal of the Loan-cum-Guarantee Agreement dated 21.06.2023, there is no impediment to constituting an arbitral tribunal for adjudicating the disputes between the parties, as mandated in terms of the judgment of the Supreme Court in SBI General Insurance Co. Ltd. v. Krish Spinning, (2024) 12 SCC 1. The said legal position has also been subsequently reiterated in Aslam Ismail Khan Deshmukh v. ASAP Fluids Private Limited & Anr., (2025) 1 SCC 502 and Maharashtra State Electricity Distribution Co. Ltd. & Ors. v. R Z Malpani, 2026 SCC OnLine SC 553.
Further, in terms of the judgments of the Supreme Court in Perkins Eastman Architects DPC v. HSCC (India) Ltd., (2020) 20 SCC 760, TRF Limited v. Energo Engineering Projects Ltd. (2017) 8 SCC 377, and Bharat Broadband Network Limited v. United Telecoms Limited, 2019 SCC OnLine SC 547 and Hindustan Construction Co. Ltd. v. Bihar Rajya Pul Nirman Nigam Ltd., (2026) 3 SCC 264, it is incumbent on this Court to appoint an independent sole arbitrator to adjudicate the disputes between the parties.
Accordingly, Ms. Laavanya Kaushik, Advocate (Mob. +91 9871049740), is appointed as the Sole Arbitrator to adjudicate the disputes between the parties.
The respondents shall be at liberty to raise preliminary objections as regards arbitrability/jurisdiction, if any, which shall be decided by the arbitrator in accordance with law.
The learned Sole Arbitrator may proceed with the arbitration proceedings subject to furnishing to the parties requisite disclosures as required under Section 12 of the A&C Act.
The learned Sole Arbitrator shall be entitled to fee in accordance with IVth Schedule to the A&C Act; or as may otherwise be agreed to between the parties and the learned Sole Arbitrator.
All rights and contentions of the parties in relation to the claims/counter-claims are kept open, to be decided by the learned Arbitrator on their merits, in accordance with law.
Needless to say, nothing in this order shall be construed as an expression of opinion of this Court on the merits of the case.
The present petition stand disposed of in the above terms.